LifeComps Commercial Mortgage Loan Index: Company Mortgage Returns Increase in First Quarter 2013 [Manufacturing Close – Up]

Commercial mortgage loans held by life insurance companies generated a total return of 1.99 percent in first quarter 2013, an improvement over the 1.85 percent return achieved in fourth quarter 2012, according to the LifeComps Commercial Mortgage Loan Index.

The LifeComps Commercial Mortgage Loan Index reported that income contributed 1.29 percent and price contributed 0.70 percent in first quarter. Pricing benefitted from a decline in mortgage spreads, which more than compensated for a small upward shift in the Treasury yield curve. Yields on the 10-year Treasury increased 9 basis points over the quarter to 1.87 percent.

For the 12-month period, total return was 7.94 percent with income contributing 5.55 percent and price adding 2.39 percent. Price gains were primarily driven by tighter credit spreads however Treasury yield movement also made a small positive contribution. The 10-year Treasury ended the period 36 basis points lower.

Of the four major property types, retail performed best over 12 months with a total return of 8.25 percent followed by apartments at 8.13 percent, office at 7.84 percent and industrial at 7.30 percent.

The LifeComps Commercial Mortgage Loan Index is a published benchmark for the private commercial mortgage market based on actual mortgage loan cash flow and performance data, which has been collected quarterly from participating life insurance companies since 1996.

Participating life insurers include Allstate Life Insurance Company, Cigna Investment Management, AXA Equitable, John Hancock, Northwestern Mutual, Principal Financial, Prudential Insurance Company of America, and TIAA.

More Information:

lifecomps.com

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